Heading into 2025, NC homeowners’ insurance rate hearing continues without resolution
The dispute between North Carolina Insurance Commissioner Mike Causey and insurance companies over their request to raise homeowners’ approved rates by double digits headed to a hearing on Oct. 7.
It was expected to “last several weeks,” according to his office.
More than 10 weeks later, it’s still not over.
After multiple delays — including a monthlong pause in November — the hearing is “in recess until Jan. 3, 2025,” Jason Tyson, a spokesman for the state’s Department of Insurance, told The N&O in an email.
The Rate Bureau, which represents some 110 companies operating in the state, submitted the filing for a statewide 42.2% average increase in January 2024. Causey rejected the request, calling it “excessive and discriminatory,” and scheduled the hearing in case the two sides could not reach an agreement on new rates. They did not. This is the first hearing under Causey’s watch. In eight years as the commissioner, he’s raised property insurance rates 16 times — all without a public hearing.
Since October, the quasi-judicial proceeding has been held in fits and starts inside the department’s second-floor hearing room in Highwood Towers at 3200 Beechleaf Court in northeast Raleigh.
Like disputed filings before, negotiations have been “long and dense” as attorneys on both sides present hours of witness testimony and data-heavy evidence to argue what they consider to be a “new, fair rate.” The Rate Bureau’s proposed increases are based on past payouts and future claims projections, and vary greatly by county. (In Durham and Wake counties, it’s asking for a 39.8% increase. In Chatham and Orange counties, it’s requesting 25.1%. In the city of Charlotte and Mecklenburg County, it’s 41.3%. )
The department’s witnesses have argued to either reduce current rates or limit increases to less than 3%.
In November, Amy Funderburk, appointed by Causey to be the hearing officer, paused proceedings for the entire month due to scheduling conflicts and someone related to the case contracting COVID, a source close to the hearing said.
In December, testimony resumed but only for a handful of days, according to online transcripts.
Tyson didn’t say what’s behind the latest pause. “We’re nearing the end of this process. We expect a positive resolution soon,” he said.
Looking ahead
State law gives the commissioner 45 days to issue an order once the hearing concludes. Causey, who has not attended the hearing, will make his final decision in consultation with the hearing officer, Tyson said. It’s expected to coincide with the start of his third term on Jan. 20.
Causey, a Republican, won reelection Nov. 5, beating his challenger, state Sen. Natasha Marcus, a Democrat, with 52.1% of the vote.
At this point, analysts say, it’s still too early to tell where he will land.
The proposed increase must be “reasonable and actuarially sound,” said Don Hornstein, the Thomas F. Taft Distinguished Professor at the University of North Carolina School of Law. “That’s a very broad range of scope within which the commissioner has to operate.”
Even so, he doubts the order will head into double digits. “There’s no way on God’s green earth that the Rate Bureau is going to get what they’ve asked for,” he said. “No matter what happens, they’re not going to be happy. They may or may not appeal.”
North Carolina is one of the only states where a Rate Bureau still exists. In almost every other state, each carrier files its own homeowners’ rates independently. In 1977, the General Assembly created the agency to file and negotiate rates on behalf of the entire industry.
The hearing is open to the public. Attendees will be seated on a first-come, first-served basis.
Transcripts of each day’s hearing are expected to be posted online the following day. For additional information, see the homeowners’ rate hearing webpage.
This story was originally published December 26, 2024 at 5:45 AM with the headline "Heading into 2025, NC homeowners’ insurance rate hearing continues without resolution."
